What is a standard bond?
A standard ERISA fidelity bond is the most common form of fidelity coverage written under Section 412 of the Employee Retirement Income Security Act of 1974. The word "standard" is shorthand for the underwriting profile of the plan being bonded: it holds qualified assets only, it has a current effective date (no significant retro-dating), and neither the plan nor any of its trustees has experienced a covered loss. Plans that fit this profile receive bond coverage at fixed published rates with no individualized underwriting beyond a basic application.
The bond names the plan as the insured. If a trustee, administrator, or any other person who handles plan funds steals, embezzles, forges, or otherwise commits a dishonest act that causes loss to the plan, the surety reimburses the plan up to the bonded amount. Coverage attaches to roles — meaning a bond written on a "blanket" basis covers all positions whose occupants handle plan funds, without naming each person individually.
- Standard Bond
- An ERISA fidelity bond issued under standard underwriting terms — fixed rates, no individualized risk evaluation, same-day issuance.
- Qualified Assets
- Plan assets held by a regulated financial institution (bank, insurance company, registered broker-dealer) and reported on the institution's statements. Examples: mutual funds, listed securities, insurance contracts.
- Blanket Form
- A bond form that covers all employees in defined positions, automatically extending coverage to new hires without endorsement.
- Effective Date
- The date on which bond coverage begins. For standard bonds, this is typically the date of application or a date within 30 days prior.
Eligibility requirements
A plan qualifies for a standard ERISA bond if all of the following are true. Any deviation routes the application to a specialty class — most commonly the Non-Qualifying Asset Bond, the ESOP Bond, or the Non-Standard ERISA Bond.
The plan holds only qualified assets
Plan assets are held by a regulated financial institution and appear on its statements. Common qualified assets include mutual funds in a brokerage account, insurance contract values, and listed securities held by a custodian. Real estate, partnership interests, limited-marketability securities, and assets held outside regulated institutions are non-qualifying and route to the Non-Qualifying Asset Bond.
The plan does not hold employer securities
Plans holding stock issued by the employer — most commonly Employee Stock Ownership Plans, but also profit-sharing plans with employer stock funds — face a heightened risk profile under Section 412 and require a different bond with a $1,000,000 maximum. Those plans route to the ESOP Fidelity Bond.
No prior covered loss
Neither the plan nor any current trustee has previously incurred a loss that would be covered by an ERISA bond. This includes losses paid out under a previous bond, losses pending claim, or losses where the plan or a trustee was a defendant in fiduciary breach litigation involving dishonest acts.
Effective date within 30 days of application
The requested effective date is no more than 30 days prior to the application date. Bonds with retro-dating beyond 30 days require specialty underwriting because the surety must assume liability for acts that may have occurred before the file was reviewed and before the premium was received.
Does your plan qualify for a standard bond?
If you can answer "no" to all three eligibility questions on our online application — non-qualified assets, employer securities, prior loss — and your effective date is within 30 days, you qualify for the standard product at published rates. The application takes about three minutes to complete.
What's covered
The standard ERISA bond covers losses to the plan caused by the following acts of dishonesty, committed by any person who handles plan funds or property:
- Fraud or dishonesty — including any wrongful taking with intent to deceive
- Theft — physical or electronic taking of plan property
- Embezzlement — conversion of plan funds entrusted to the bonded person
- Forgery — false signatures on checks, transfers, or plan documents
- Misappropriation — diversion of plan funds to unauthorized use
- Wrongful abstraction — taking of plan property without colorable claim of right
- Wrongful conversion — exercising rights of ownership over plan property
- Willful misapplication — knowing use of plan funds for unauthorized purposes
Coverage extends to any officer, employee, trustee, or agent of the plan who handles plan funds, on a blanket basis — meaning you do not need to name each covered person on the bond. New hires who assume bonded positions are automatically covered as of their start date.
The bond shall provide protection to the plan against loss by reason of acts of fraud or dishonesty on the part of the plan official, directly or through connivance with others. — 29 U.S.C. § 1112(a)
What's excluded
The standard bond does not cover everything. The following losses are typical exclusions and require separate coverage where applicable.
| Excluded Loss | Where It Belongs |
|---|---|
| Investment losses from market movement or imprudent investment selection | Fiduciary Liability Insurance |
| Cybersecurity losses from external bad actors (hacking, ransomware) | Cyber Liability Policy |
| Social engineering fraud by a third party impersonating an authorized person | Crime Policy with Social Engineering Endorsement |
| Losses to the employer as opposed to the plan itself | Commercial Fidelity Bond |
| Breach of fiduciary duty claims (failure to monitor, diversification failures) | Fiduciary Liability Insurance |
| Acts discovered more than two years after termination of the bond | Run-off / Discovery Period extension |
Many of these exclusions are addressed by carrying the standard bond plus a fiduciary liability policy. The two coverages are complementary — the bond protects the plan from dishonesty by insiders, the fiduciary policy protects the trustees personally from liability claims. Most well-governed plans carry both. Read more on our Fiduciary Liability Policy page.
Premium & pricing
Standard ERISA bonds at ERISA-Bonds.com are priced on a published rate schedule with no individualized rating, no application fees, no broker fees, and no annual renewal fees. The premium amounts below cover a full three-year bond term. Multi-year terms (4 and 5 years) are available at additional discount.
| Bond Amount | Three-Year Premium | Annualized |
|---|---|---|
| $50,000 | $230 | $77 / year |
| $75,000 | $270 | $90 / year |
| $100,000 | $310 | $103 / year |
| $150,000 | $340 | $113 / year |
| $250,000 | $400 | $133 / year |
| $350,000 | $460 | $153 / year |
| $500,000 | $550 | $183 / year |
The premium is paid once at issuance for the full term. There is no recurring billing, no policy fee, and no broker commission deducted from the premium. Bond amounts above $500,000 are written as Non-Qualifying Asset Bonds or specialty placements — call (800) 373-2804 for a custom quote.
How claims work
Bond claims are uncommon but the process matters. Here is what a plan sponsor or trustee should expect when a covered loss is discovered.
- Discover the loss.The covered loss is identified — typically through routine plan audit, Form 5500 preparation, internal review, or a participant complaint. Document everything immediately and preserve all relevant records.
- Notify the surety promptly.The bond requires notice "as soon as practicable" after discovery, and in any event within the timeframes set by the bond form. Late notice can void coverage. Email Underwriting@SuretyOne.com or call (800) 373-2804.
- Submit proof of loss.The surety provides a proof-of-loss form within days of notice. Complete it with supporting documentation: bank records, plan statements, audit findings, criminal complaints if filed.
- Investigation.The surety reviews the proof of loss, may interview witnesses, and confirms coverage. Most clean cases are resolved within 60-90 days of complete submission.
- Payment to the plan.Once coverage is confirmed, the surety pays the plan up to the bonded amount. The surety then has subrogation rights to pursue the dishonest individual for reimbursement.
Notice timing is critical.
Most ERISA bond claim denials trace back to late notice. The moment you suspect a covered loss has occurred, document the discovery date and notify the surety. You can always withdraw a claim that turns out not to be covered — you cannot resurrect a claim that was denied for late notice.
How to get one
The application process at ERISA-Bonds.com takes a single afternoon for most standard plans:
- Calculate your required amount.Use our free calculator or the formula in our complete guide. Required amount is at least 10% of plan funds handled in the prior year.
- Complete the online application.Plan name, sponsor, address, sponsor email, number of trustees, requested effective date, and the three eligibility questions. About three minutes.
- Receive your quote.The system returns your quote immediately based on the bond amount you select. The quote is binding for 30 days.
- Submit payment information.Card information is encrypted and not charged until an underwriter has reviewed your file.
- Underwriter review & bond issuance.A real underwriter (not a chatbot) reviews your application for accuracy. Once approved, the bond is issued the same business day and delivered by email.
Frequently asked questions
Can I name multiple plans on one standard bond?
Yes, provided the bond amount is sufficient to satisfy each plan's individual statutory requirement and the bond form does not allow a single limit to be allocated across plans on a first-come-first-served basis. We use a modern bond form that addresses this correctly.
How long does the bond actually last?
The standard bond is issued for a three-, four-, or five-year term. At the end of the term, you may renew at the then-current rate. The bond does not lapse silently — we send renewal notices 60 and 30 days before expiration so there is no unintended gap in coverage.
What if my plan grows during the bond term?
The bond amount is set at issuance based on prior-year plan funds handled. If your plan grows materially mid-term such that 10% of funds handled now exceeds the bonded amount, you can purchase an increase endorsement at any time without waiting for renewal. Most plans size the initial bond with some headroom for growth.
Does the standard bond cover the trustee personally?
No. The standard bond names the plan as the insured. It pays the plan when a person who handles plan funds commits a dishonest act. The trustee is not insured by the bond and is not protected from personal liability claims; that protection comes from a separate fiduciary liability policy.
Can the bond be backdated?
Standard bond effective dates are limited to the date of application or up to 30 days prior. Retro-dating beyond 30 days is a specialty product because it obligates the surety to assume liability for acts that may have occurred before the application was reviewed. If you need a bond effective more than 30 days in the past, call (800) 373-2804.